SEC 30-Day Yield vs Distribution Yield

SEC 30-day yield and distribution yield are two different measurements of the same fund, and a fund page will often show one without saying which. The SEC 30-day yield is a standardized figure defined by regulation: the income a fund's holdings earned over the most recent 30 days, net of the fund's expenses, annualized. Distribution yield is the cash the fund actually paid out, measured against the current share price. They answer different questions, and placing them in the same column of a comparison table is a common way to reach a wrong conclusion about which fund pays more.

The three yield numbers a fund page can show

1. SEC 30-day yield, also called the standardized yield. The fund takes the interest and dividend income its holdings accrued over the trailing 30 days, subtracts the expenses charged over that window, divides by the maximum offering price on the final day, and annualizes with a formula the SEC prescribes. Every fund runs the same formula over the same length of window, which is what makes it comparable from one fund to the next.

1. Trailing twelve-month distribution yield. Sum every per-share distribution paid over the last twelve months, divide by the current share price. It is a record of cash that already moved.

1. Forward, indicated, or annualized distribution yield. Take the most recent distribution, multiply it by the number of payments the fund makes in a year, divide by price. One payment carries the entire estimate.

The arithmetic is identical in all three cases, annual dollars over price, and it is the same arithmetic laid out in how to calculate dividend yield. The disagreement lives entirely in the numerator. The first number counts income the portfolio earned. The other two count cash the fund handed out. Nothing requires those to be the same quantity.

SEC 30-day yield vs distribution yield, side by side

The SEC figure is produced from a fund's own accrual records and published in its documents, so nobody outside the fund can rebuild it from market prices. Both distribution yields can be rebuilt. The panel below computes them for a group of widely held ETFs out of the distributions each one actually paid over the last twelve months and its most recent closing price.

WITH
    px AS
    (
        SELECT
            ticker,
            argMax(toFloat64(close), date) AS last_close
        FROM global_markets.stocks_daily_aggs
        WHERE ticker IN ('SPY', 'SCHD', 'VYM', 'QQQ', 'TLT', 'JEPI')
          AND date >= today() - 30
        GROUP BY ticker
    ),
    paid AS
    (
        SELECT
            fund_ticker       AS ticker,
            sum(cash)         AS ttm_cash,
            argMax(cash, exd) AS latest_cash,
            argMax(freq, exd) AS pays_per_year
        FROM
        (
            SELECT
                any(ticker)                 AS fund_ticker,
                any(toFloat64(cash_amount)) AS cash,
                any(ex_dividend_date)       AS exd,
                any(toUInt16(frequency))    AS freq
            FROM global_markets.stocks_dividends
            WHERE ticker IN ('SPY', 'SCHD', 'VYM', 'QQQ', 'TLT', 'JEPI')
              AND ex_dividend_date > today() - 365
              AND ex_dividend_date <= today()
              AND toUInt16(frequency) > 0
            GROUP BY id
        )
        GROUP BY fund_ticker
    )
SELECT
    p.ticker                                                       AS fund,
    round((100 * p.ttm_cash) / x.last_close, 2)                    AS ttm_distribution_yield_pct,
    round((100 * p.latest_cash * p.pays_per_year) / x.last_close, 2) AS indicated_yield_pct,
    round(abs(((100 * p.latest_cash * p.pays_per_year) / x.last_close)
              - ((100 * p.ttm_cash) / x.last_close)), 2)           AS gap_pct
FROM paid AS p
INNER JOIN px AS x ON x.ticker = p.ticker
ORDER BY gap_pct DESC, fund ASC

Across the 6 funds here, sorted by how far apart the two figures land, JEPI sits at the top: a trailing twelve-month distribution yield of 7.95% against an indicated yield of 7.64%, 0.31 percentage points apart. At the other end of the panel, SPY prints 0.98% and 0.99%, a distance of 0.01 points. Same day, same prices, same formula. The only thing that changed is which payments entered the numerator.

What happens after a fund raises its payout

An indicated yield reprices the moment a larger distribution goes ex-dividend. A trailing twelve-month yield needs a full year before the last of the older, smaller payments rolls out of its window. In between, the two numbers disagree, and both are computed correctly.

The trace below follows one monthly-paying bond fund, the iShares 20+ Year Treasury Bond ETF (TLT). Both lines are yields on the same fund on the same day. The first annualizes that month's single payment. The second sums the previous twelve payments.

WITH
    monthly_px AS
    (
        SELECT
            toStartOfMonth(date)           AS m,
            argMax(toFloat64(close), date) AS px
        FROM global_markets.stocks_daily_aggs
        WHERE ticker = 'TLT'
          AND date >= today() - 1600
        GROUP BY m
    ),
    monthly_cash AS
    (
        SELECT
            toStartOfMonth(exd) AS m,
            sum(cash)           AS cash
        FROM
        (
            SELECT
                any(ex_dividend_date)       AS exd,
                any(toFloat64(cash_amount)) AS cash
            FROM global_markets.stocks_dividends
            WHERE ticker = 'TLT'
              AND ex_dividend_date >= today() - 1600
              AND ex_dividend_date <= today()
            GROUP BY id
        )
        GROUP BY m
    ),
    joined AS
    (
        SELECT
            p.m    AS m,
            p.px   AS px,
            c.cash AS cash
        FROM monthly_px AS p
        INNER JOIN monthly_cash AS c ON c.m = p.m
    ),
    rolled AS
    (
        SELECT
            m,
            px,
            cash,
            sum(cash) OVER (ORDER BY m ASC ROWS BETWEEN 11 PRECEDING AND CURRENT ROW) AS ttm_cash,
            count()   OVER (ORDER BY m ASC ROWS BETWEEN 11 PRECEDING AND CURRENT ROW) AS months_counted
        FROM joined
    )
SELECT
    formatDateTime(m, '%Y-%m')        AS month,
    formatDateTime(m, '%b %Y')        AS month_label,
    round((100 * 12 * cash) / px, 2)  AS indicated_yield_pct,
    round((100 * ttm_cash) / px, 2)   AS ttm_yield_pct
FROM rolled
WHERE months_counted = 12
ORDER BY m ASC

In Apr 2023, the fund's indicated yield stood at 3.03% while its trailing twelve-month yield was 2.88%. By Aug 2026 the two read 4.8% and 5.13%. Wherever the lines separate, one of them is describing the current month and the other the past year. A figure labelled only as the fund's yield could be either one.

What a rate move does to a bond fund's yield figures

A bond fund holds bonds bought at the coupons available when it bought them. As market yields move, the fund's monthly payment moves only as maturing bonds are replaced with new ones. Of the three figures, the SEC 30-day yield registers that turnover first, since its window is the most recent 30 days of accrued income. The trailing twelve-month distribution yield registers it last.

SELECT
    formatDateTime(toStartOfMonth(date), '%Y-%m') AS month,
    formatDateTime(toStartOfMonth(date), '%b %Y') AS month_label,
    round(avg(toFloat64(yield_3_month)), 2)       AS treasury_3m_pct,
    round(avg(toFloat64(yield_10_year)), 2)       AS treasury_10y_pct
FROM global_markets.treasury_yields
WHERE date >= today() - 1600
  AND date <= today()
  AND yield_3_month > 0
  AND yield_10_year > 0
GROUP BY toStartOfMonth(date)
ORDER BY toStartOfMonth(date) ASC

Between Mar 2022 and Aug 2026, the three-month Treasury yield moved from 0.54% to 3.9%, and the ten-year from 2.38% to 4.66%. Read this panel next to the previous one and the timing separates by construction: market rates move on the day, a fund's monthly payment reprices over following months, and a twelve-month sum is the last of the three to settle. Comparing a bond fund quoted on its SEC yield against one quoted on its trailing distribution yield during a period like this compares two different points in time.

Where covered-call and return-of-capital funds fit

This is the case where a distribution yield stops being a yield in any income sense. A covered-call ETF sells options against its holdings and pays most of the premium out, usually monthly. Option premium is neither interest nor dividend income, so it never enters the SEC 30-day yield at all. A covered-call fund holding large-cap equities can post an SEC 30-day yield close to a plain index fund's while its advertised distribution yield runs several times higher. Neither figure is wrong. They count different cash.

Some distributions are return of capital, the fund handing back part of your own invested principal rather than paying income. Return of capital sits inside a distribution yield and never inside an SEC yield, and it lowers your cost basis on arrival, which surfaces later as a larger taxable gain when you sell. A double-digit distribution yield with a large return-of-capital component is a different object from a double-digit SEC yield.

A second tell is payment stability. An indicated yield multiplies one payment by the number of payments in a year, so it is only as reliable as the payment it starts from. The panel below takes two years of regular distributions for the same funds and measures how many payments landed and how far the largest sat above the smallest.

SELECT
    fund_ticker                                 AS fund,
    count()                                     AS payment_count,
    round(100 * ((max(cash) / min(cash)) - 1), 1) AS largest_vs_smallest_pct
FROM
(
    SELECT
        any(ticker)                 AS fund_ticker,
        any(toFloat64(cash_amount)) AS cash
    FROM global_markets.stocks_dividends
    WHERE ticker IN ('SPY', 'SCHD', 'VYM', 'QQQ', 'TLT', 'JEPI')
      AND ex_dividend_date > today() - 730
      AND ex_dividend_date <= today()
      AND toUInt16(frequency) > 0
    GROUP BY id
)
GROUP BY fund_ticker
HAVING count() >= 4
ORDER BY largest_vs_smallest_pct DESC, fund ASC

SCHD carries the widest range of the 6 funds, its largest regular distribution landing 203.3% above its smallest across 8 payments. VYM is the steadiest, with a spread of 16.4%. Annualizing one payment from the first fund produces a materially different headline depending on which month that payment came from. Doing the same to the second barely moves the answer.

Which yield to use, and when

• Comparing two funds against each other: the SEC 30-day yield. It is the only one of the three built to a common definition, and the only one with expenses already taken out.
• Estimating the cash that will reach your account: the trailing twelve-month distribution yield, treated as a starting point rather than a forecast.
• Reading an income fund's headline number: check the footnote for which distribution definition it uses, and whether return of capital is part of it.
• Building any table with more than one fund in it: pick one definition and apply it to every row. A table that mixes an SEC yield with an indicated yield ranks funds by their footnotes.

A like-for-like fund comparison, of the kind in SCHD vs VOO dividend yield, only holds when both sides are measured the same way. The wrapper matters as well: SPY's dividend yield and its cash drag shows how a fund's legal structure can move the payout itself.

FAQ

Is the SEC 30-day yield the same as the distribution yield?

No. The SEC 30-day yield measures income a fund's holdings earned over the last 30 days after expenses, standardized so any two funds can be compared. Distribution yield measures cash the fund paid out, which can include option premium and return of capital.

Why is a fund's distribution yield higher than its SEC yield?

Usually one of two things is happening. The distributions contain something other than interest and dividend income, such as option premium or return of capital, or a recent payment ran ahead of the fund's current income. Option-income funds show the widest gaps.

Which yield tells me how much cash I will receive?

The distribution yield is the closer of the two, since it is built from payments the fund actually made. The trailing twelve-month version describes a year that already finished, and no distribution schedule is guaranteed to repeat.

Why do two websites show different yields for the same ETF?

Most often one site is showing the trailing twelve-month distribution yield and the other the latest distribution annualized. A third possibility is that one is quoting the SEC 30-day yield from the fund documents. All three can be correct at once for the same fund on the same day.

Does the SEC 30-day yield include capital gains?

No. It counts interest and dividend income accrued over the 30-day window, net of expenses. Realized capital gains distributions and return of capital sit outside it, which is one reason an equity fund's SEC yield can look small next to its distribution yield.

Every panel here carries the exact SQL that produced it, open one to see how each figure was counted. To pull the distribution history for a fund you follow, ask for it in plain English on the Strasmore terminal.